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Construction is both a lucrative and risky business. As long as you have enough capital, a solid business plan, safe and experienced workers and construction liability insurance should be able to experience a profit and steady business growth. However, one big accident can jeopardize an entire business and also your career. Here are some of the biggest risks in the construction industry, and why it’s important to make sure you’re properly insured before starting any projects.
Safety is the highest priority on any construction site, and it’s also the greatest liability. If you walk by any construction site you’re likely to find some if not all of the following:
- Large equipment
- Scattered building materials
- Nail guns
- Concrete mixers
Between all of these objects, any number of incidents can occur. It’s imperative to talk to insurance experts at agencies like SB One Insurance Agency to ensure you have the best safety coverage possible.
Believe it or not, project scheduling is another one of the highest risks in construction. Because the schedule represents the largest cost on the project, large errors can cost several thousands of dollars. Even being one day off can have significant implications.
Some construction companies are responsible for overseeing design specifications, and if there are any problems with the design you can actually be held responsible and not necessarily the architect.
Having the best possible insurance coverage can help protect you and your assets.
To newcomers, obtaining business insurance can seem like a complicated matter. The numerous options, coverage limits and insider language can all make it appear to be more difficult than it is. To help you simplify the process, here are three key coverages that you should plan to include in your new policy.
Professional Liability Insurance
Also known as errors & omissions insurance, professional liability protects you in case a third party claims to have experienced a loss because of an error or omission on your part. As stated by the experts at Moody Insurance Worldwide, if a lawsuit is brought against you, your policy would cover any legal fees as well as any judgment or settlement amounts that you owe.
General Liability Insurance
General liability provides broader coverage against everyday lawsuits. If a third party were to claim that they sustained an injury or property damage because of your business activities, your policy would cover any legal fees or other amounts that you owe.
Commercial Property Insurance
Commercial Property covers you in case your property becomes damaged or lost. You can choose to include your office building, equipment or furniture under your policy and it would cover the cost of repairing or replacing them. Events that can be covered by your policy usually include certain storms, fires, theft and vandalism.
With these three coverages, you’ll have a solid foundation for your insurance policy. Work with an experienced agent to craft a full policy that meets your
Insurance coverage contracts are generally set according to a timeline of six months to one year worth of coverage. Premiums are sometimes paid monthly through those periods, although others may require quarterly or in-full payments at the time policy is established. However, some providers also offer a tail period of coverage. This is a specified period of time where claims can still be reported against the insurer even if the policy has expired.
Do You Have Extended Coverage?
As the team at Axis Insurance Services advises, you can check with your current policy about existing tail options or you can purchase a separate ERP insurance policy. Many times a business will take out the additional policy, as it helps limit potential liabilities if the company is closing or is canceling an insurance coverage and won’t be replacing coverage. A business that has an occurrence-based policy could also have a potential gap between the occurrence reporting period and incident, thereby needing the extension of coverage.
Type of Tail Coverage
If you are considering the additional coverage, there are two types of tail coverage
- One-Way Tail. This coverage is offered by the insurer, potentially due to policy cancellation, non-renewal situations or the coverage is rewritten.
- Two-Way Tail. This coverage can be provided by either the intent of the insured or the insurer in the cancellation or non-renewal of a policy.